Home-buying is cheaper than renting, report claims

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THE average cost of buying a home in Scotland is 6 per cent lower than the average rental cost, according to research from Bank of Scotland (BoS).

The average monthly costs associated with buying a three-bedroom house stood at £524 in December 2012, £34 lower than the typical monthly rent of £558 paid on the same property type. Over the course of a year this is equivalent to a saving of £408.

The gap between the average costs of buying and renting has widened by £19 per month over the past year.

At the end of 2011, the monthly costs associated with home buying were £15 lower than renting. Over the past year, buying costs have remained the same while the cost of renting has increased by 3 per cent.

The report does not include a breakdown of Scottish regions, but takes an average of all house prices throughout Scotland.

Nitesh Patel, housing economist at BoS, said: “The decline in home-buying costs, combined with an increase in rents, has greatly improved the financial attractiveness of buying a home.

“This shift has contributed to the increase in the number of house purchases in Scotland in 2012. Despite this pick-up, home-buying levels are still only half the level at the height of the boom. Concerns over job security and raising a deposit are the main obstacles to people buying their own home.”